Thursday, June 11, 2009

Let There Be Light

Republicans offer a common sense alternative to Cap and Trade

If you are "The One," when you say something, it must be so. President Barack Obama has touted the Waxman-Markey Cap and Trade legislation to be the centerpiece of his energy and environmental policy. Democrats claim Waxman-Markey provides a market based solution to the perceived problems in energy and the environment. Nothing could be further from the truth. This scheme, cooked up by Obama and the Democrats in Congress, will do little more than drain the American economy and have a negligible effect on the environment.

Rasmussen reports that only 24% of Americans have even a remote idea that Cap and Trade refers to energy and environmental legislation. Fewer still understand the ramifications such legislation would have on the American economy while having little impact on global warming. Painting with a broad brush, Cap and Trade involves the Federal government establishing limits on an emitted substance (the Cap) which then issues allowances that various entities pay to obtain. Those entities can then use the allowance to "pay" for the right to emit the substance, or they can exchange the allowance with others (the Trade). (More information here) Since we are all too aware that all additional costs associated with any product or service are passed along to the consumer, Cap and Trade is nothing more than an elaborately hidden price increase, or tax, on all those who light their homes, drive to work, or use any plastic product.

Waxman-Markey will set off a trade war. It has been called by George Will the new "... Smoot-Hawley tariff of 1930" which "ignited reciprocal protectionism that suffocated global trade and deepened the Depression." Will calls, "The cap-and-trade legislation passed recently by a House committee is Smoot-Hawley in drag: It contains provisions for tariffs on imports designated "carbon-intensive" -- goods manufactured under less carbon-restrictive rules than those of the proposed U.S. cap-and-trade regime. Eco-protectionism is a recipe for reciprocity." Goodbye American jobs.

Ultimately, the pressure of the caps are intended by their proponents to drive companies and individuals toward alternate energy sources. Nice try. There are very few sources of energy that can come close to meeting our existing and future needs for energy. Only fossil fuels (oil and natural gas) and nuclear power are currently technologically feasible to meet the demands of a modern economy. Fossil and nuclear fuels supply the U.S, with over 91% (70.4% and 20.7% respectively) of its electricity needs, with hydroelectric power coming in a distant third with 5.6%. The technologies involved to make a serious change in current power distribution (wind, solar, alternate fuels) are tens-of-years away from being able to make a significant dent in these percentages. Let's not even talk about transportation which is almost entirely dependent on oil.

Because of special interests, a regulatory labyrinth exists at all level of government that have prohibited for decades the construction of new refineries or nuclear powerplants. Those same special interests prohibit expansion of proven U.S. fossil fuel reserves (20.97 billion barrels of oil and 5.977 trillion cu m of natural gas) which makes us ever more reliant on imports from overseas. Our annual fossil fuel imports (about 3.5 billion barrels of oil and 31 billion cubic meters of natural gas) puts hundreds of billions of dollars into the hands of governments and tyrants who may not necessarily have our best interests in mind. Our direct competition with other emerging economies like China and India for overseas oil sources drives up the price of oil. These emerging economies also are not encumbered by overburdening environmental regulations that allow their products to undercut ours in price. (Statistical source: CIA World Factbook and Energy Information Administration)

The Democrats' answer to the worst recession in decades is to introduce what amounts to a national energy tax that will lead to higher energy prices and further job losses. Cap and Trade would cause gas prices and home utility bills to rise and deal American families an even greater economic hardship. Congress should be making every effort to leverage our proven reserves of fossil fuels and to take advantage of the new technologies in nuclear power generation. Sadly, the opposite is true. Instead, the Democrats offer thousands of dollars in extra energy costs and the potential loss of millions of jobs for an energy policy that will do very little to convert our national energy consumption and clean up our environment.

Republicans in the House of Representatives have cobbled together some of the better ideas on energy and the environment into "The American Energy Act." (.pdf download) This proposal is an "all of the above" approach that reduces the energy dependence of the nation and keeps more jobs here at home, all while providing for a cleaner environment.

Regulatory hang-ups are addressed. The proposal reduces red-tape and cost caused by the Environmental Protection Agency arising from having to endlessly identifying impacts and alternative locations for energy projects. It ensure proper environmental review while and curtailing the lawsuits that are designed to slow down and obstruct American energy policy. While ensuring people a day in court, expedited judicial review is required and all court cases are filed in the District Court for the District of Columbia to prevent "forum shopping".

Oil and gas reserves are expanded. Revenue generated by the sale of new oil and gas leases are invested in renewable and alternative sources of energy and also provides for tax incentives for energy conservation. Development of America’s alternative fuels is encourage by repealing the current prohibitions on government purchasing fuels derived from sources such as oil shale, tar sands and coal-to liquid technology. Utilizing the vast coal reserves of the U.S. the plan also encourages the use of clean coal technology by allowing federal agencies to enter certain long-term contracts and loan agreements.

Oil refinery construction is increased by streamlining and accelerating the permitting process. The bill also instructs the President to convert at least three closed military installations for use as a refineries, including at least one suitable refinery of biomass to produce biofuel.

The Republican proposal establishes a goal to bring 100 new carbon-emission-free nuclear reactors online over the next 20 years. It does do by installing a new regulatory and permitting regime. This plan also address nuclear waste storage by reversing recent funding and regulatory decisions concerning Yucca Mountain located deep in the Nevada desert.

American ingenuity is tapped with a competition to advance R&D, pilot programs and commercial application of new and innovative energy technologies. a $500 million prize goes to the first U.S. automobile manufacturer to sell 50,000 economically feasible, fuel-efficient vehicles that get 100 mpg. Tax credits for the production of renewable electricity, like wind, solar, biodiesel and biomass are established, made permanent or expanded.

The bill provides tax incentives for businesses and homeowners who improve their energy efficiency. It also extends tax credits for using energy efficient appliances and energy efficient upgrades made to existing homes, a tax credit for individuals who purchase a new energy efficient home and a tax credit for energy efficient commercial buildings, home energy audits and smart meters.

This Republican energy and environment plan is bold, broad and forward looking. It is grounded in what can be done, not on a Rainbow and Unicorns approach favored by Obama and the Democrats. We don't want or need a national energy tax. We don't want or need the loss of jobs to countries who use lower priced energy. We want to reduce our dependence on dictators and tyrants who hold the oil leach. We want to harness our own resources, including the ingenuity of the American people. The House Republicans have given us a great starting point.